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Draft oil law could help modernize Iraq's
oil sector
21.1.2007
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The law would require that all
oil revenues go to a central fund, then be
distributed to Iraqis in every region and province
according to population.
BAGHDAD, January 21,-- A new draft hydrocarbons
law will pave the way for "transparent and fair"
competition in bids to develop Iraq's oil wealth,
the oil minister said Sunday as he sought to restore
the confidence of foreign investors.
The new law, if approved, is expected to encourage
foreign oil companies with their investment clout
and technology to modernize Iraq's oil sector and
meet the country's goal of doubling the current
crude production of 2.5 million barrels per day by
2010.
Iraq's proven oil reserves stand at about 115
billion barrels, the world's third largest after
Saudi Arabia and Iran.
The oil minister, Hussain al-Shahristani, said new
oil fields will be added as bids are submitted by
foreign companies.
"The competition will be transparent and fair and
companies will be chosen according to their modern
technological capabilities to guarantee the highest
benefits for Iraqis," al-Shahristani said at a news
conference. "We will not consider their
nationalities and we will ignore any contract
doesn't achieve the highest benefits."
Al-Shahristani refused to give a timeline for
parliamentary action and did not say how the
ministry would negotiate with foreign companies.
He also cautioned that attacks against oil
installations and employees were increasing, with
289 people killed over the past year and 179
wounded.
"The ministry is always suffering from these
terrorist attacks. I call upon all honest people to
co-operate with the oil ministry in order to find
those who are attacking the employees of this sector
and provide us with any related information," he
said.
Insurgents have frequently targeted oil facilities,
pipelines and employees, disrupting exports and
efforts to modernize the industry.
The oil minister stressed that all Iraqis will share
in the profits amid concern by many Sunnis that they
will lose out to the Shiites and Kurds who dominate
the country's two chief oil regions in southern and
northern Iraq. Those groups want regional control
over oil production and revenues.
Iraq's Sunnis and much of the Baghdad government
want to maintain national control over Iraq's
petroleum resources as was the case during former
leader Saddam Hussein's Sunni-dominated rule.
"The constitution states that oil and gas are for
all Iraqis in all provinces and regions, and
according to this conception we drafted this oil law
to help promote Iraq's unity and prosperity of its
people," he said.
Last Thursday, the
ministry's spokesman Assem Jihad told The Associated
Press the law would require that all oil revenues go
to a central fund, then be distributed to Iraqis in
every region and province according to population.
Jihad said the law also would stipulate that oil
contracts signed by Saddam's government or by the
semiautonomous northern government of Kurdistan be
reviewed and amended if needed.
On a technical matter, al-Shahristani said that a
new metering system to track oil and gas flows from
Iraq's southern export ports had been fixed.
Iraq's economy has been severely weakened by oil
smuggling to neighbouring countries, a problem that
could be checked in part by the metering system. The
smuggling has created a fuel crisis that leads to
occasional shortages even though Iraq is one of the
world's leading producers of oil.
Some experts believe that oil smuggling may be
funding Iraq's insurgency
AP
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